Anything Less Than Elizabeth Would Be Un-Warren-ted

Do you hear music? Financial reform is the law of the land, but its success is hardly a matter of simply signing the document. Much of the law is open to interpretation.

Congress has written the music, but whether we get Handel or honking come performance time will depend on those picked to deliver on it.

David Weidner interviews Elizabeth Warren, chair of the Congressional Oversight Panel, about the financial-system bailout, TARP and the need for an independent, consumer protection agency.

Think of recent appointments to top regulatory jobs that have either energized staid agencies or dragged robust ones into conflict. There was Mike Brown's disastrous reign at the Federal Emergency Management Agency, the steadying hand of Hillary Clinton at the State Department, John Dugan's controversial time at the Office of the Comptroller of the Currency and Mary Schapiro's energetic, if not always effective, impact on the Securities and Exchange Commission.

That's why the biggest job to be created by the Dodd-Frank Financial Wall Street Reform and Consumer Protection Act already has created controversy about who should get it. Elizabeth Warren, the front-runner to lead the new Consumer Protection Financial Agency, faces mounting criticism that she's unqualified and too anti-bank to do the job.

It really shouldn't be that way. There really is no other choice. Ms. Warren, a Harvard Law School Professor who has been chairing the House Oversight Committee minding TARP's progress has been the CPFA's biggest proponent since she floated the idea in 2007.

Giving the job to someone else would be like letting Steve Jobs come up with the iPad and then giving it to Microsoft Corp. to market. You'd almost certainly lose the soul.

Ms. Warren has spent the last few years of her career preparing for this moment. She's written about the devastating effects of bankruptcy on U.S. households and has given countless interviews. Consumer protection as a part of financial reform has been her single biggest legacy in Washington, save perhaps for her testy public exchanges about TARP with Treasury Secretary Timothy Geithner.

Wouldn't you know it, that sometimes confrontational relationship has led to speculation that Mr. Geithner was lobbying against Ms. Warren behind the scenes. It's a charge the Treasury Department denies, but not out of the realm of possibility, given Mr. Geithner's public scrapes with her about TARP and his likely support of Michael S. Barr, assistant Treasury Secretary, who is reportedly on the short list.

Even with Mr. Geithner's support or his ambivalence, Ms. Warren seems to have worn out her Washington welcome.

Edward Yingling, chief executive of the American Bankers Association, said there's "tremendous concern" in the industry over Ms. Warren's possible nomination. State banking groups in Virginia and Nebraska have vocally opposed her nomination. The U.S. Chamber of Commerce spent millions on an ad campaign against the protection agency.

In her defense have come unions and consumer groups including the Service Employees International Union and Americans For Financial Reform. There's even a grassroots lobbying campaign that's gathered more than 160,000 signatures.

Again, support and opposition for Ms. Warren have fallen along the lines of banking interests and consumer interests, just as they did for the broader reform. But what about Ms. Warren herself? When I spoke to her in March, she was cool to the idea of spending more time inside the Beltway.

"I hate Washington," she said. "There are days I wake up and I say 'OK, I could go to Washington or I could stab myself in the eye."

She added back then that she savored the prospect of heading back to Harvard. And when I asked her if she could have the same impact in Cambridge, Mass., she argued that the university and teaching were important too.

She did not, however, say no, she wouldn't be interested in leading the CFPA, and she even shot back at the critics who argue it will hurt banks and consumers.

"The protection agency is about people understanding credit agreements," Ms. Warren said. "It's not fancier than that. It isn't bigger or crazier than that."

Ms. Warren declined to comment further for this column.

It's that simple understanding of the role of consumer protection that underscores why Ms. Warren is the best choice. When you realize that she's only seeking to keep consumers from being misled -- not looking to cut out predatory financial products necessarily or useful innovations -- you begin to see that the charges that Ms. Warren will make it harder for banks to sell and more expensive for consumers to buy are really trumped-up. She wants consumers to get credit, but she wants them to have a minimum level of understanding.

She didn't use the analogy, but comparing marketing in the tobacco industry with the financial industry isn't a stretch. In both cases, it's truth in packaging: cigarettes can cause cancer, pay-as-you-go loans can cause foreclosure. People still smoke, don't they?

Should she get the job, Ms. Warren might have a tough road. She would be watched closely by critics. She might polarize support and opposition for the new agency just because she's leading it. Depending on your point of view, diplomacy is not her strong suit. Bringing in someone without Ms. Warren's baggage might make the politics easier for the nascent agency.

But with all due respect to Mr. Barr and Eugene Kimmelman, the long-time consumer advocate who's also reportedly on the president's short list of nominees, they aren't Ms. Warren. They haven't eaten and breathed consumer finance the way Ms. Warren has of late.

They may be adept at playing the instrument of consumer financial protection, but they aren't the virtuoso Ms. Warren has proven herself to be.

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